Bitcoin's Bumpy Ride: Grayscale's $400M Outflows Trigger 5% Price Plunge
Mar 15, 2024
Bitcoin faced a significant downturn, experiencing a 5% drop in price, as Grayscale's Bitcoin outflows surged to $400 million. The cryptocurrency briefly dipped below $69,000 per coin before rebounding above $70,000, although still below its recent all-time high of $73,700. This decline is attributed to various factors, including concerns over escalating inflation rates, with recent data from the Labor Department's Bureau of Labor Statistics revealing a 0.4% increase in consumer prices last month and a 3.2% rise from the previous year, exceeding expectations. There are apprehensions that the Federal Reserve might delay interest rate cuts initially anticipated for May, prompting a sell-off in both digital assets and stocks. Moreover, Grayscale's significant Bitcoin transfers to its custodian, Coinbase, totaling $400 million, have fueled apprehensions of potential selling pressure. Grayscale's actions are linked to investors redeeming their holdings in its Bitcoin Trust ETF, converted from a closed-end fund in January, which has flooded the market with Bitcoin, intensifying downward pressure on prices. Despite these challenges, other Bitcoin ETFs have seen record-high net inflows, signaling sustained investor interest in the cryptocurrency.
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